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SDLT reduction and refunds 2019-10-31T10:52:24+00:00

Stamp Duty Land Tax refunds and savings

Stamp Duty Land Tax is complex and ever-shifting, subject to more alterations since inception in 2003 than any other comparable tax. The legislation governing it is now full of exceptions, exemptions and reliefs covering the vast variety of property types and property buyers, not all of which are obvious to conveyancers who are generally inclined – thanks to lack of help from HMRC and conflicting messages from their regulator, the SRA – to differentiate simply between a whether a property is residential or commercial for purposes of SDLT calculation.

This means people buying property with land, outbuildings, woodland or separate annexes, for example, may find themselves paying a higher SDLT bill on their purchase than they should.

Why is SDLT so complex?

Many accountants are not tax expert

Clients tend to be over reliant on their accountant for all tax matters. The complexity of the tax system means that most accountants are no longer experts in tax and specialist tax advice should be sought.

Solicitors unsupported

Solicitors, lawyers and agents are not tax specialists, and yet in many cases can become liable in cases where they have made incorrect assumptions regarding a property and the SDLT position which leads to incorrect filings and payments being made.

Tax changes

SDLT legislation has been subject to multiple changes, most recently in July 2016.  The full range of changes have significally complicated the application of this tax and led to widespread confusion.

When is SDLT relief available?

Land

If your property has land that has a non-residential element to it, it’s likely you can qualify for “mixed-use” SDLT rates and potentially save thousands. Examples might be the lease of the land or buildings, farming use, title restrictions on the use for residential purposes.

Annex

Does your property have a ‘granny annex’ or separate living accommodation? You could qualify for “multiple dwellings” tax relief.

Outbuildings

You may qualify for multiple dwellings relief or mixed-use which could substantially reduce the applicable SDLT rates and save significant tax.

Woodlands and orchards

Where woodland or orchards are parcelled up in the same transaction alongside a residential property, it may be argued the purchase is “mixed-use” resulting in lower rates of SDLT being applied and significant savings being achieved.

Six or more residential properties 

If you have 6 or more residential properties as part of one transaction, there may be a choice between multiple dwellings relief and commercial rates of SDLT.

SDLT collected by HMRC in 2019

£11.9bn

Estimated overpayments 2018

£2bn overpaid SDLT

Refunds issued per month

900
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